It is not unexpected that investors would take their punishment out on Lionsgate now that its “Hunger Games” cash cow is over, but no-one expected it to be this fast.
As part of its quarterly earnings call with Wall Street analysts this morning, the subject of the underperformance of “The Hunger Games: Mockingjay Part 2” came up. That film grossed $653 million – the lowest grosser in the franchise to date and off from Lionsgate’s own estimates – the studio saying the film “underperformed their profit margins by over $100 million”.
Combined with duds like “Mortdecai” and the “Point Break” remake, Wall Street reacted quickly and shares in the studio quickly dropped 32% in trading this morning. Blame for the underperformance was put on terrorist attacks in Europe and the box office overperformance of “Star Wars: The Force Awakens” with the latter “hitting our numbers by somewhere between $50M and $100M.” The film’s weak performance in China was also singled out, blaming it on the date and competition from “The Martian” and “Spectre”.
Lionsgate is increasing its 2017 film slate by four films, from 13 to 17 movies in wide release. The studio’s plan is to lower overall film costs and diversify their portfolio – on the way are “Power Rangers,” “Hood,” “The Odyssey,” and second AND third “Now You See Me,” “La La Land,” “Gods of Egypt,” “John Wick 2,” a “Macgyver” reboot, and the recently acquired “The Magic Tree House” based on Mary Pope Osborne’s award-winning young-adult book series.
Lionsgate also revealed in a filing it intends to inform premium pay TV channel Starz that it is exploring a possible merger between the two, confirming speculation that has been swirling since last year.